Unless you are very, very lucky, credit is one of those things that you learn through trial by fire. What that means is when you reach the age to get a credit card, you get no training, no advice, and you're turned loose to spend as you will. Once you establish credit, other companies reach out to you with fancy deals enticing you to take out a credit card with them as well (earn 50,000 points if you spend $5,000 in 2 months, or something similar). Before you know it, you're in debt over your ears and starting to panic. There is no need to do so, just slow down (slow way down), start thinking clearly about how you want to live your life financially and take positive steps to work towards those goals. Even the biggest of goals is met by taking that first step. Once you start moving, goals are often met a lot faster than you could have even guessed. So what are the best ways to control credit card debt?
1. The best way to control credit card debt is to pay off what you charge monthly, in full. While that might seem difficult if you are in over your head, keep it in mind for the future, when you do get your debt back to a manageable rate (and you will, you just have to work at it). Paying it off in full is manageable only if you are charging what you can afford. So why charge at all if you are just going to pay it off in full (and could just pay in cash)? Positive activity can go a long way in helping you build or repair your credit score. If creditors see you paying your debt in full each month they see you as reputable. That can work in your favor when it comes time to borrow for big things in the future (if you choose to do so), like a car, business loan, mortgage application, etc.
2. The snowball effect can build up faster than you might think. You can start out by paying off the credit card that has the least amount charged on it, and keep working your way up until you've reconciled all of your charged up debt. That is the way many people tend to do it, which makes sense because if you have run up debt, you might be short on cash to make payments. Another way to do it however, is to pay off the credit card that has the highest amount of debt first and work your way down. If you are able to do so, you feel immediate relief and it can lead to faster reconciliation. Either way can lead to controlling your credit card debt.
3. There are options available that allow you take out a loan to pay off all credit cards in full. The idea behind it is that you have a monthly payment that is less than what you are paying on multiple credit card payments. The crux however, is that people who are not disciplined financially tend to think of their zero balance as a playground to run up more debt. They may believe they can manage but the debt can again add up quickly and then they have a loan payment (usually with a very high interest rate) and mulitple credit cards they have racked up new debt on as well, compounding the problem, rather than 'fixing' it. That means those considering this route must do so with great caution. Until your spending habits and financial thinking are healthy, your charging habits are not likely to change and you don't want to put yourself in a worse situation than you are trying to get out of with your atttempts to control credit card debt.
4. Pay off debt slowly but surely. That means not charging anything new (very important) and paying more than the minimum monthly payment amounts that are due (equally important). It's very difficult to pay off debt if you are only paying the least amount due each month. Speed up the process by paying the most than you can comfortably afford to do without putting your finances at risk in other ways (don't rob Peter to pay Paul).
5. Create a budget so you can manage where your money goes and adjust it as needed so you can put it where it should be going instead. A lot of people underestimate the power of a budget, but I say try it first, before you decide you don't like it. There's something about having an organized and deliberate plan for your money that helps change your mindset. If you can't live without 'play money' that's the beauty of making a budget, YOU make it. Factor in play money if you must and stick with the plan you create.